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SEGMENT REPORTING
OBJECTIVE
Reporting financial information about:
Different types of products and services an enterprise produces, and The different geographical areas in which it operates.
BENEFIT TO USERS
Better understanding of the performance of the enterprise; Assess the risks and returns of the enterprise.
APLICABILITY
Accounting period commencing on or after April 1, 2001 in respect of following enterprises:
DEFINITIONS
What is a BUSINESS SEGMENT ?
Distinguishable Engaged
component of an enterprise.
service.
Subject
DEFINITIONS
What is A GEOGRAPHICAL SEGMENT ?
Distinguishable Engaged
component of an enterprise
in providing products or services within a particular economic environment is subject to risks and returns that are different from those of components operating in other economic environments
That
Its revenue from sales to external customers is 10 per cent more of the total revenue, or Its segment result, whether profit or loss, is 10 per cent or more of the combined result of all segments in profit or loss, or
Its segment assets are 10 per cent or more of the total assets of all segments.
Contd.
The location of production or service facilities and other assets of an enterprise; The location of its customers.
COMPARATIVES
If a segment is identified as a reportable segment in the current period, preceding period segment data is presented for comparative purpose, even if that segment did not satisfy the 10% threshold in the preceding period. A segment identified as a reportable segment in the immediately preceding period should continue to be a reportable segment for the current period even if it does not meet the 10% threshold.
BUSINESS SEGMENT
GEOGRAPHICAL SEGMENT
Matrix presentation
If the risk & return of an enterprise are equally effected by differences in the products and services it produces and by differences in the geographical areas in which it operates, then the enterprise should use BUSINESS SEGMENTS as its PRIMARY SEGMENT reporting format and GEOGRAPHICAL SEGMENTS as its SECONDARY REPORTING format & full segment disclosures is given on each basis
DISCLOSURES
a. Segment revenue from sales to external customers b. Segment revenue from transactions with other segments c. Segment result d. Total carrying amount of segment assets; e. Total amount of segment liabilities; f. Additions to tangible and intangible fixed assets; g. Depreciation and amortisation for the period h. Significant other non-cash expenses